According to CoinDesk, if regulators greenlight the proposed amendments, FETH will become one of the first spot Ether ETFs in the U.S. to offer passive staking yield directly to shareholders.
Mechanics of the yield rollout
The Fidelity Ethereum Fund currently manages approximately $898 million in net assets. Under normal market conditions, the amended filing allows the trust to stake up to 100% of its Ether holdings, though Fidelity hasn't established a hard minimum threshold.
To maintain operational flexibility, the trust will hold back a portion of its ETH to cover daily liquidity needs, fund expenses, and share redemptions.
Fidelity plans to pass through 85% of gross staking rewards directly to fund investors. The remaining 15% cut will be split among the fund sponsor, custodians, and node operators.
To power its staking infrastructure, Fidelity tapped institutional node operators Blockdaemon, Figment, and Galaxy.
Tax clearance and payout structure
Net staking yields will first cover baseline fund expenses, with the remaining balance distributed to investors as quarterly cash payouts.
Under IRS guidelines, crypto trusts must distribute net staking earnings at least once a quarter. Fidelity noted that the fund may also sell small tranches of Ether to raise additional cash for these distributions when needed.
This pivot follows a key IRS safe harbor bulletin issued in November 2025. That regulatory guidance confirmed that qualifying crypto trusts can stake assets without risking their grantor-trust tax status, clearing the runway for Wall Street issuers to bring native yield to spot crypto products.
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